Banking provides financial assistance to the manufacturer and trader. Candidates who are pursuing in Class 11 are advised to revise the notes from this post. Protection against these risks is provided by insurance of goods. Necessary funds can be obtained by businessmen from a bank. This may further be divided into. 2. Commerce includes two types of activities, viz., (I). But these goods are required for consumption in different parts of the country. CBSE Business Studies Chapter 1 Nature and Purpose of Business in PDF format are available for free download in myCBSEguide mobile app. Human causes include such unexpected events like dishonesty, carelessness or negligence of employees, stoppage of work due to power failure, strikes, riots, management inefficiency, etc. They bring out diverse finished products that we consume, or use through the conversion of raw materials or partly finished materials in their manufacturing operations. Which of the following cannot be classified as an auxiliary to trade? Manager performance and development, therefore, is an important objective. Those engaged in professions are known as professionals. Special arrangement must be made for storage of goods to prevent loss or damage. → Advertising: It is one of the most important methods of promoting the sale of products, particularly, consumers goods like electronic goods, automobiles, soaps, detergents etc. Extractive industries supply some basic raw materials that are mostly products of geographical or natural environment. These are concerned with providing support services to primary and secondary industries as well as activities relating to trade. → Primary Industries: These include all those activities which are connected with the extraction and production of natural resources and reproduction and development of living organisms, plants etc. 2. What factors are important to be considered while starting a business? Class 11 Business Studies Notes Chapter 1 Nature and Purpose of Business. Any mistake in this regard can result in high cost of production, inconvenience in getting right kind of production inputs or serving the customers in the best possible way. Financial problems like rise in interest rate for borrowing, levy of higher taxes, etc., also come under these types of causes as they result in higher unexpected cost of operation of business. The first thing to be decided by any entrepreneur of a new business is the nature and type of business to be undertaken. On payment of a nominal premium, the amount of loss or damage and compensation for injury, if any, can be recovered from the insurance company. Capital investment required as per size and nature of business. That is the reason why there is hardly any sizable business enterprise whose only objective is maximization of profit. Its a fun way of learning using assessments. 1. Various programmes for motivating managers need to be implemented. Secondary industries may be further divided as follows: These industries are engaged in producing goods through processing of raw materials and thus creating form utilities. Plans should also be made about how the employees will be trained and motivated to give their best performance. These industries remain engaged in breeding plants and animals for their use in further reproduction. A business enterprise must aim at standing on stronger footing in terms of offering competitive products to its customers and serving them to their satisfaction. Storage and warehousing activities remove the hindrance of time by facilitating holding of stocks of goods to be sold as and when required. But if he/she sells mobile regularly either through a shop or from his/her residence, it will be regarded as a business activity. These activities may be broadly classified into two groups —. Candidates who are pursuing in Class 11 are advised to revise the notes from this post. The decision will be influenced by the customer requirements in the market and also the kind of technical knowledge and interest the entrepreneur has for producing a particular product. It is practically impossible for producers and traders to contact each and every customer. Expertise and training in a specific field is must. Factory building, machinery, furniture etc. It is a source of income for business persons. Thus, business means being busy. For example, mining of an iron ore is a primary industry, but manufacturing of steel by way of further processing of raw irons is a secondary industry. transport, banking, etc. Qualification and training as prescribed by   the employer. The 11th grade is an important milestone because it lays the foundation for your final board exams the next year. 3. Professional code of conducts is to be followed. In order to ensure continuous survival and progress, every enterprise must aim at greater productivity through the best use of available resources. The chances of fire, theft or strike are examples of pure risks. These industries provide service facilities such as transport, banking, insurance, warehousing, communication, packaging and advertising. Also, we will understand the differences between business, profession, and employment. State the different types of economic activities. Limited capital needed for establishment. Which would mean mobilizing various resources, fulfilling necessary legal formalities, starting the production process and initiating the sales promotion campaign. Disclaimer | Transport facilitates movement of goods from one place to another. Every business must earn a reasonable profit which is so important for its survival and growth. → Degree of risk depends mainly upon the nature and size of business. must be protected against fire, theft and other risks also employees are required to be protected against the risks of accident and occupational hazards. The business activities can be classified as: → Industry: It refers to economic activities, which are connected with conversion of resources into useful goods. In other words, these activities facilitate movement, storage, financing, risk coverage and sales promotion of goods. The best app for CBSE students now provides Nature and Purpose of Business class 11 Notes Business Studies latest chapter wise notes for quick preparation of CBSE exams and school based annual examinations. Manufacturing industries may be further divided into four categories on the basis of method of operation for production. The enterprises might lose business and may be unable to earn profit. Products of these industries are usually transformed into many other useful goods by manufacturing industries. Thus, for example, if a person sells his/her domestic mobile even at a profit, it will not be considered a business activity. Generally, the term industry is used for activities in which mechanical appliances and technical skills are involved. It embraces all those activities, which are necessary for maintaining a free flow of goods and services. Business risks arise due to a variety of causes including natural, human, economic and other causes. What is business risk? Any business requires physical resources like plants, machines, offices, etc., and financial resources, i.e., funds to be able to produce and supply goods and services to its customers. (a) Production of goods and services (b) Presence of risk (c) Sale or exchange of goods and services (d) Salary or wages (d) Salary or wages 2. When goods are purchased and sold in bulk, it is known as wholesale trade. Prices are thereby maintained at a reasonable level through continuous supply of goods. With the help of Notes, candidates can plan their Strategy for particular weaker section of the subject and study hard. Membership of a professional body and certificate of practice. These days’ goods are produced on a large scale and it is difficult for producers to themselves reach individual buyers for sale of their products. (ii) Innovation in various skills and activities needed to supply products and services. The nature of business risk are: → Business risks arise due to uncertainties. Objectives are needed in every area where performance and results affect the survival and prosperity of business.